The Beach Energy Ltd (ASX: BPT) share price is dropping on Wednesday following the release of the company's quarterly update.
In morning trade, the energy company's shares are down 2% to $1.74.
Beach share price lower on Q4 update
For the three months ended 30 June, Beach delivered a 9% increase in production to 5.6 MMboe. Management advised that this was driven by higher customer gas demand from the offshore Otway Basin.
This underpinned a 10% increase in quarterly revenue to $504 million. This comprises oil revenues of $195 million and gas and gas liquids revenue of $309 million.
Full year guidance achieved
For the full year, the company achieved its guidance with production of 21.8 MMBoe.
This led to total revenue coming in at $1,749 million, which represents a 15% increase year on year and was largely in line with consensus estimates for the year.
Another positive is that its unit field operation costs are expected to come in at the low end of its guidance range of $11.50 to $12.50 per boe. So, with the company commanding an average realised price of $78.2 per boe for all its products, it looks set to report strong free cash flow and earnings next month.
In fact, at the end of the quarter, the company had a net cash position of $165 million, which was up from $7 million three months earlier.
Management commentary
Beach Energy's chief executive officer, Morné Engelbrecht, was pleased with the final quarter and full year. He commented:
A key plank of the Beach strategy is to continue investing in new gas supply to support the east coast market. Our results this quarter against the backdrop of the current energy crisis validate this strategy. This quarter Beach supplied an additional 3.5 PJ (0.6 MMboe) of gas from the Otway Gas Plant to Australian domestic retailers, thanks in part to recent commissioning of two Geographe development wells.
Engelbrecht appears confident on the company's prospects for the year ahead. He said:
We enter FY23 with strong momentum as we complete our major development projects and deliver more new gas to the domestic market. In the Otway Basin, we will connect four offshore Thylacine development wells and the Enterprise discovery to the Otway Gas Plant to bring production rates back to full capacity. In the Perth Basin, Waitsia Stage 2 is developing material gas volumes for both domestic and global LNG markets.
Beach remains focused on delivering our major Otway and Perth Basin development projects. We are also planning for our next phase of growth, including exploration in the Perth, Otway, and Cooper basins, and we do so with a Balance Sheet capable of supporting our growth aspirations.
